Ron Paul Introduces Bill to Audit the Fed

February 26, 2009

Madame Speaker,

I rise to introduce the Federal Reserve Transparency Act. Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar. Since 1913 the dollar has lost over 95% of its purchasing power, aided and abetted by the Federal Reserve’s loose monetary policy. How long will we as a Congress stand idly by while hard-working Americans see their savings eaten away by inflation? Only big-spending politicians and politically favored bankers benefit from inflation.

Serious discussion of proposals to oversee the Federal Reserve is long overdue. I have been a longtime proponent of more effective oversight and auditing of the Fed, but I was far from the first Congressman to advocate these types of proposals. Esteemed former members of the Banking Committee such as Chairmen Wright Patman and Henry B. Gonzales were outspoken critics of the Fed and its lack of transparency.

Since its inception, the Federal Reserve has always operated in the shadows, without sufficient scrutiny or oversight of its operations. While the conventional excuse is that this is intended to reduce the Fed’s susceptibility to political pressures, the reality is that the Fed acts as a foil for the government. Whenever you question the Fed about the strength of the dollar, they will refer you to the Treasury, and vice versa. The Federal Reserve has, on the one hand, many of the privileges of government agencies, while retaining benefits of private organizations, such as being insulated from Freedom of Information Act requests.

The Federal Reserve can enter into agreements with foreign central banks and foreign governments, and the GAO is prohibited from auditing or even seeing these agreements. Why should a government-established agency, whose police force has federal law enforcement powers, and whose notes have legal tender status in this country, be allowed to enter into agreements with foreign powers and foreign banking institutions with no oversight? Particularly when hundreds of billions of dollars of currency swaps have been announced and implemented, the Fed’s negotiations with the European Central Bank, the Bank of International Settlements, and other institutions should face increased scrutiny, most especially because of their significant effect on foreign policy. If the State Department were able to do this, it would be characterized as a rogue agency and brought to heel, and if a private individual did this he might face prosecution under the Logan Act, yet the Fed avoids both fates.

More importantly, the Fed’s funding facilities and its agreements with the Treasury should be reviewed. The Treasury’s supplementary financing accounts that fund Fed facilities allow the Treasury to funnel money to Wall Street without GAO or Congressional oversight. Additional funding facilities, such as the Primary Dealer Credit Facility and the Term Securities Lending Facility, allow the Fed to keep financial asset prices artificially inflated and subsidize poorly performing financial firms.

The Federal Reserve Transparency Act would eliminate restrictions on GAO audits of the Federal Reserve and open Fed operations to enhanced scrutiny. We hear officials constantly lauding the benefits of transparency and especially bemoaning the opacity of the Fed, its monetary policy, and its funding facilities. By opening all Fed operations to a GAO audit and calling for such an audit to be completed by the end of 2010, the Federal Reserve Transparency Act would achieve much-needed transparency of the Federal Reserve. I urge my colleagues to support this bill.

111th Congress – 1st Session

H.R. 1207

A BILL

To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.

1. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.
This Act may be cited as the “Federal Reserve Transparency Act of 2009″.

SEC. 2. AUDIT REFORM AND TRANSPARENCY FOR THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.

(a) IN GENERAL. – Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after “shall audit an agency” and inserting a period.

(b) AUDIT. – Section 714 of title 31, United States Code, is amended by adding at the end the following new subsection:

“(e) AUDIT AND REPORT OF THE FEDERAL RESERVE SYSTEM. –

“(1) IN GENERAL. – The audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) shall be completed before the end of 2010.

“(2) REPORT –

“(A) REQUIRED. – A report on the audit referred to in paragraph (1) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each sub-committee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.

“(B) CONTENTS. – The report under subparagraph (A) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.”.

Sponsor

Rep. Ronald Paul [R-TX]

Cosponsors

The number of co-sponsors keeps growing! Check out the latest list here.

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  • Ezio Romano’

    In my opinion, the ways used by politicians and bureaucrats to put their hands in the pocket of the citizens are:
    1. Taxes
    2. Monopoly of public services
    3. Inflation
    and then
    4. Corruption
    5. Mafia
    God bless you Mr. Ron Paul

    »crosslinked«

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  • http://noneyet,justmyemailaddress L inda K. Mitchell

    Is there anyone who would help me get results for a credit card company’s outrageous behavior and analogous for holding me at gunpoint with their LEGAL BUSINESS right to charge me for being late–not a missed payment, just late, after years upon years of 100% perfect pay standing no matter what over ten years, up to 12/15 I have been with this Co. where reps rarely speak English and do not follow through or help. I digress. I just had triple bypass; a single disabled sr. female who has had not ONE missed or late payment ever with these guys; I was not able to plan for this procedure–it was a near-miss heart attack on Jan 22, surgery the 24th on Sunday; flown up by plane to a great facility out of this county due to living alone, I was not able to go home (Im trying to keep this brief, but it is difficult) for over three weeks in a place after ICU Cardiac, so there was no spouse, no secretary, family to help with bills. I was cut off from my home and responsibilities the longest I was ever, and my normal payment is around $30.00, I always send more, often a lot more over minimum, have pd it off more than once; we have had a perfect relationship since the onset. due to my being opened up from sternum to stem, also having to have my carotids done when i am sufficiently healed from this bypass open heart. i am alone, 100 lbs, and have taken good care of myself and my reponsibilities for over 30 years. If a citizen did this, it would be as if they (SS soldiers) sp? came to my door with gun in hand and robbed me, they;d be arrested. but corps can do it all they want to anyone, my story speaks for many, many people, this is not just for myself, i am a staunch supporter of Mr Dr Paul for a very long time and our thoughts and ideas are identical. i have been severely mistreatead (in criminal ways) by a county full of corrupt doctors, too, but there are good drs, too; i just don’t have acess to them. I need the entire story out there if someone can help me get it told. I am overwriting because my ire is so itense, but usually am a good strong writer, a born freedom “fighter” not the best word as i am a pacifist, so I am not whining, it is not about the money in that I could pay it, but of course, it is not the point. somehow, this has to be regulated, the rampant, blatant greed is out of control. With my perfect record I refuse to pay any of this.(except normal, a agreed)– they gave me no credit for the min. payment I did send a few days late as I was inhouse healing 24/7 medical watch, and in the kind of pain that keeps one quite out of it. This has to stop and I am not afraid to fight this. I have a strong following in my writings and editorials and trying to fight injustice; i was a detective for fraud most especially, but other works, too; now that i am 62 suddenly I am stupid, nobody and dispensible, but my skills did not go away with declining health issues. Please help me. I will be able to contribute to your/peers, etc. for payment, and have been ready for years.a9and I will keep working for these causes even if you can’t help me–one does not have to do with the other– I want and need to do this for myself, yes, but for all the thousnds/millions? who are victims of these tactics. they aren’t even US companies as if it matters any longer. I want to remain as anonomous as possible as long as a journalist or some one can know I am for real and I have the proof and info. I can hold my own, but i need credibility and support from those whose passion for TRUE change is equal to mine— and why are we allowing thsese things to happen to us and do nothing? Excuse the poor construction, but I am very — well, you know, i am sure. I need some help to get this all told and it is one heck of a story, there is so much more. I’m writing all about the corruption in a certain powerful group of people just in this county alone, but for starters, this paper I received for this card company today, all in red, with outlandish charges for first time, I want and need to be involved and have been, but not anywhere near deeply enough. I believe I have the skills (not recognized now that I am physically limited) my mind is stronger than ever. my writing skills can be very powerful; I’ve already ticked off some big shots locally. to me, a form of flattery. Can you help at all? I can and will give back, of that I am certain. Did not plan to write a novel my first letter. I’ll get some rest. I’m only 5 weeks out of surgery and doing well on my own now, i do have to hope this does not sound crazy; I’m just overwhelmed and fed up. Sincerely, and thanks in advance, just in case. . Please excuxe my redundancies and repetitions.., for obvious reasons, I hope. I’m just worn to shreds. Linda

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  • http://ceaser Harold Pack

    I wonder if Ron Paul realizes that a good argument for his bill to audit the fed is based in the constitution? If so why hasn’t he brought it up? “Article 1. Section 9. No money shall be drawn from the Treasury, but in Consequence of Appropriations made by law; and a regular Statement and Account of the Receipts and Expendatures of all public Money shall be published from time to time.” The fed’s secrecy is another in your face violation of the Constitution. In other words audit the fed is already fundemental law, but like so many other things is being ignored by the federal government.

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  • christine

    Check this out! State governments are pushing back!

    IDAHO
    http://www.legislature.idaho.gov/legislation/2009/HJM004.pdf

    WHEREAS, Congress has inappropriately delegated its monetary authority to the private federal reserve bank, thus failing to protect and provide a sound monetary system as defined and mandated by the Constitution of the United States, forcing an unstable currency on us resulting in the past, and the current, economic perils; and

    WHEREAS, a number of proposals from past and present Administrations and Congress may violate the Constitution of the United States.

    NOW, THEREFORE, BE IT RESOLVED by the members of the First Regular Session of the Sixtieth Idaho Legislature, the House of Representatives and the Senate concurring therein, that the state of Idaho hereby claims sovereignty under the Tenth Amendment to the Constitution of the United States over all powers not otherwise enumerated and granted to the federal government by the Constitution of the United States

    at the state sovereignty site
    http://www.tenthamendmentcenter.com/2009/02/23/state-sovereignty-resolutions/

    Not all of the state’s petitions read exactly alike. Check out your state.

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